Wednesday, March 10, 2010

Republican Deficits and Budget Reconciliation

By Robert Hockett

Now that it's virtually certain that comprehensive health insurance reform will be pursued at least in part through House-Senate budget reconciliation, the present affords an opportune moment to take stock of past resorts to that procedure. Happily, this past Sunday's NYT provides a helpful survey of the contents and fiscal magnitudes of all major reconciliation bills passed by Congress since the procedure's first use in 1980. All who take interest in the details will find the full article commesurately interesting. Here I shall simply draw out a few particularly intriguing highlights.

Of the 15 major reconciliation bills passed from 1981 to the present, 10 were passed when Republicans held at least two of the three active organs of federal government -- Senate, House, and White House. (I'll buy-in for present purposes to the traditional mythology pursuant to which the Supreme Court is characterized as 'passive.') The remaining 5 were passed when it was the Democrats who held at least two of the three active organs. So on the question of who makes most use of the procedure, it looks like the Republicans have it by a ratio of 2 to 1. Highlight number one.

Next, some DoL readers might be interested in the party-composition of the federal government, and especially of the Congress, on these past occasions of resort to reconciliation. At least this might be so insofar as resort to the procedure when different parties hold different organs of government could strike some as more endangering of 'minority rights' than resort to the procedure when one party holds all three organs, or at least both chambers of Congress. (I employ scare-quotes here simply because we're not talking about 'fundamental human rights,' after all, but putative rights of legislative minorities to obstruct even contitutionally permissible legislation by majorities -- even very large ones, like, say, 59-41.) Here, then, are a few highlights on that score:

Three of the Republicans' 10 reconciliation bills were passed when the GOP controlled all three active organs of federal government, and one of the 10 was passed when they held, so to speak, a bit more than '2.5' of them: that would be the 2001 tax cut legislation, more on which presently, which passed when the Senate was evenly divided and accordingly subject, in theory at least, to tie-breaking by the Vice President. (As it happens, the measure passed by 58 to 33 vote; but tie-breaking was required to pass its 2003 follow-up, also more on which presently.) The remaining 6 -- hence, 3/5 of total -- Republican uses of reconciliation occurred while the three active organs of federal government were divided between the parties -- in all but one of them, with the Republicans holding one chamber of Congress and the White House, while the Democrats held the other chamber of Congress. (I'll get to the counterpart Democrat stats below.)

As for Democratic resorts to reconciliation, well, since the Republicans account for 10 of the 15 uses, it is of course trivially true, under our (for the time being, anyway) de facto system of two party rule, that the Democrats account for the remaining 5. Of those five reconciliation bills passed while Democrats held at least two of the three active organs of the federal government, two were when they held all three such organs, the other three -- hence, as in the case of the Republicans, 3/5 of the total -- when they held both chambers of Congress but not the presidency. There might, then, in this connection, be some room for argument that the Democrats' (half as many) resorts to reconciliation were more majoritarian than were the (twice as many) Republican resorts, given the nay-saying power wielded by a veto-holding president; but I won't attempt to hang any hats on this interesting prospect at present.

On to highlight number three: At least as interesting as the two parties' comparative proportions of total resorts to reconciliation (again, that 2 to 1 ratio in favor of Republicans), I think, is what they have used reconciliation for. Consider first the matter of budgetary impact, a subject of considerable media hype these days: Of all 15 uses of reconciliation, 3 have raised federal budget deficits, and all 3 were Republican uses. (Hence, again trivially but nevertheless significantly, 30% of Republcan resorts to reconciliation have been deficit-raising.) Two of these, moreover, each raised the federal deficit by much more than any other reconciliation acts save one -- one passed by Democrats -- have managed to lower it.

Largest among these Republican deficit-raising reconciliation acts was the 'Economic Growth and Tax Relief Reconciliation Act' of 2001. The effect of this legislation was to increase the federal deficit by over half a trillion dollars -- specifically, $552 billion -- over five years.

The second-largest deficit-growing impact came two years later with the Republicans' 'Jobs and Growth Tax Relief Reconciliation Act' of 2003, which increased the federal deficit by more than another third of a trillion -- specifically, $342.9 billion -- over five years. This one, moreover, required a tie-breaking vote in the Senate by Vice President Cheney -- of 'Reagan showed that deficits don't matter' fame -- to pass.

Finally, case three -- the Republicans' 'Tax Increase Prevention and Reconciliation Act' of 2005, which passed by a 54-44 vote in the Senate -- added another $70 billion to the federal deficit over 4 years.

All 5 Democratic resorts to reconciliation, by contrast to the Republican case, brought substantial decreases to the federal deficit. Of these, by far the largest was the 'Omnibus Budget Reconciliation Act' of 1993, which lowered the federal deficit by more than 2/5 of a trillion -- specifically, $433 billion -- over five years and ultimately passed, against stiff Republican opposition, by a vote of 51-50. (Yep, that means Al Gore can take credit for the largest reconciliation-wrought cut to the federal deficit rather as Dick Cheney can take credit for the second-largest reconciliation-wrought growth in the federal deficit.)

The Democrats also take the prize for the second-largest reconciliation-wrought cut to the federal deficit. That would be the 'Omnibus Budget Reconiciliation Act' of 1990, which trimmed $236 billion from the deficit over 5 years -- although in this case it bears noting that there was substantial moderate Republican support (remember moderate Republicans?) as well, including from then-President G. H. W. Bush, who was punished by his 'base' at the voting booths shortly thereafter.

All remaining uses of reconciliation, be they by Republicans or Democrats, involved smaller decreases to the federal deficit -- generally around $130 billion (Republicans in 1981 and 1982, Democrats in 1997) or less, usually much less.

A final point worth considering in respect of the contents of past reconciliation acts has to do with how 'purely fiscal' as distinguished from 'social-policy-oriented' they have been. This distinction is implicated, of course, any time somebody darkly hints or vaguely suggests that it is in some sense illicit to employ reconciliation as a means of passing social policy over the objections of recalcitrant minorities in the Senate. Against this backdrop, what is perhaps most striking is how sweeping, in social policy terms and indeed even express aims, virtually all resorts to reconciliation since 1981 have been. Nary a one seems to have neglected to make significant changes to AFDC, Medicare, Medicaid, CHIPs, and/or other social welfare and social insurance programs. And that is to say nothing of the overt social policy objectives typically sought through all major tax overhaul legislation.

What, then, to make of all this? Well, perhaps I am missing something, but against the backdrop just rehearsed, it is hard to see what would be so importantly different -- let alone 'illegitimate' or problematically 'minority-trampling' -- about using reconciliation to handle what ever small gaps remain between the House and Senate health insurance reform bills passed this past autumn and winter, respectively, by supermajorities. The subject programs, for one thing, look to be of the same sort as have been past such programs in all earlier reconciliation bills -- health insurance, after all, constituting one of the three classic forms of social insurance afforded in all polities with advanced economies (even our own, by and large!) since the time of Bismarck. The Democrats, for another thing, control both the White House and both chambers of Congress with huge majorities. And, finally, perhaps best of all in light of current business media chatter, the legislation now contemplated would constitute yet another case in which the Democrats maintain their track record of resorting to reconciliation not only just about twice as rarely as Republicans, but also only to lower, rather than as in the Republican case to raise, federal deficits.

(Not that there's anything wrong with that -- i.e., with well spent deficit moneys -- as Neil has forcefully shown in previous posts!)

16 comments:

I think the problem with this is the difference between perception and reality. Sure, you can point to times Republicans used reconciliation to effect major policy changes, although I still think tax and spending cuts are closer to the purpose of reconciliation than a wholly new regulatory program. But having led everyone to believe that they would proceed on a 60-vote basis--and having lost a high-profile election in which the Republican campaign expressly on the theme of denying a 60th vote--isn't it a little clever to say, well, we never really needed 60 votes anyway? It's a little like the Phillies announcing that, since the Yankees have a lot of left-handed power hitters and they beat us in the World Series, we're moving the right field fence out thirty feet next year. Sure, they would have the right to do so, and they could not doubt point to other teams that had even longer right-field fences. But wouldn't most people perceive this as cheating, and wouldn't they be correct in doing so?

P.S. Michael, I would like to know who supplies your word verifications. "Gentlec" sounds like it might be an English word, although I have no idea whatsoever what it means. But "mizespe?" Are you sure this isn't Hebrew? I wonder if there is a coded conversation taking place here that I can't follow--perhaps I should call Glenn Beck?

So if the Dems had come right out and said, right off the bat, that they didn't care about winning 60 votes for passage in the Senate, are you saying that the Reps would have said "fine, go ahead"? C'mon. The point is that the President looked for 60 votes so that he could achieve some sort of weak bipartisanship on a very important piece of legislation. This is consistent with his having said, time and again, that he wanted to change the culture in DC. I think that Obama really really thought that the Dems could craft a piece of legislation that would bring a number of somewhat more moderate Reps on board. This is why the process has gone on as long as it has. I can only imagine how long it would have taken a newly elected Rep Congress and Rep President to pass or extend a large tax cut for the wealthy. Hmmm. Two minutes, max, with no time for debate.

When Reps are in power and Dems complain about the structure and pace of the legislative process, the Reps talk up the importance of majoritarian democracy. [Did you see that wonderful clip of Judd Gregg waxing eloquent on the subject of majority rule when Dems were complaining about some previous budget reconciliation when the Reps controlled the Senate? See http://politifi.com/news/Gregg-Reconciliation-Is-The-Rule-Of-The-Senate-VIDEO-226401.html] Now, when the Dems are making the same argument that the Reps made not long ago, the Reps cry foul? Give me a break.

I think the problem here is, once again, the more or less complete sense of virtue on the Democratic side and the more or less complete unwillingness to attribute anything but cynicism to Republicans. Given this analysis, it is all but impossible to separate procedural arguments, however cynical, from substantive goals. There is nothing wrong with this if the people making the arguments identify themselves as advocates for their position; but when they claim the mantle of scholarship it is unconvincing.

Three quick thoughts, Michael: The first is that as I understand it, the plan is for the House to vote to approve the already-passed Senate bill and for marginal changes that 'reconcile' this bill with certain House preferences to be handled through reconciliation. In that sense the contemplated use of reconciliation seems no more 'major' -- indeed, it seems less major -- than previous uses of reconciliation, especially Republican such uses.

The second is that there is no reason to privlege the 'it was a vote against health insurance reform legislation' interpretation of the special election in MA. Indeed, given that MA has itself already passed health insurance reform legislation of its own from which much the the current federal legislation takes its own cue (under Romney, no less), this seems to be either an implausible interpretation of that vote, or an interpretation that bears no legitimate national significance (if, for example, some MA voters voted against the fed bill because they've already got their own and don't give a toss about other Americans). I accordingly think it much better to view the MA election as a repudiation of Coakley's apparent complacency and partisan 'sense of entitlement.'

Finally third, I regard the resort to reconciliation here not as an isolated 'end run' sort of trick resorted to only because of a recently lost full 60 supermajority, but as long overdue acknowledgement that the false hope or pretense that 'bipartisanship' is possible these days should at last be abandoned. The filibuster is predicated on the old 'gentleman's club' mode of Senate operation, and is as obsolete as that premis itself. We've just acknowledged, in effect, that ours is now more or less a parliamentary form of government, and there's no longer any point in pretending otherwise. I'm happy to relinquish Dem resorts to filibuster now too -- let the majority rule on these things, and let us accordingly learn all the more quickly that mistaken policies (like most Republican ones over 2000-08 were) are indeed mistaken.

Sam, perhaps needless to say, I'm entirely on board with you here. I suppose my own comments are no more than complements to your own characteristically sharp observations.

1. I'm not sure how the effort to meld reconciliation with the Senate bill changes things. It was understood that whatever bill was written would need 60 votes in the Senate, and now that has magically changed to 50. It may or may not be legally valid (there's some question about it) but it still looks like cheating.

2. I think health care and national issues generally were clearly central to the MA vote. When Democrats have done well in by-elections they have invariably made similar claims.

3. I find the entire "the GOP didn't cooperate, so we have no choice but to go it alone" both condescending and inappropriate in a Democracy. The Republican Party is philosophically opposed to national health care and always has been so. As such it has both the right and responsibility to oppose it. Efforts to ram through a plainly unpopular policy by procedural maneuvers will simply increase the polarization and make Obama even less popular.

1. Whoever said that it was "understood" that whatever bill was written would need 60 votes in the Senate? Sure, this is what the Prez and Senate Dems were working to achieve. But was there some sort of promise? Show me. If I try to win your support for a piece of legislation and you won't give it to me, is it somehow unfair or wrong for me to try to pass it without your support? Budget reconciliation is allowed by the rules of the Senate. Since when do the Dems owe it to the Reps not to use reconciliation? What exactly am I missing here?

2. I agree that health care was central to the MA vote. What is not at all clear is whether the MA electorate was more ticked off about the fact that the Dems have been sitting on their behinds getting bogged down in health insurance reform minutiae or more ticked off with the Dems for trying to pass health insurance reform in the first place.

3.Going it alone (by majority vote) is neither condescending nor inappropriate in a democracy. If this were true, then all parliamentary systems would be, by their very nature, undemocratic. Besides, are you willing to chide Senator Gregg and others who have extolled the virtues of majority rule in the Senate as condescending? The one caveat to majority rule in my book is that a majority should not be able to violate fundamental rights (including the right to equal opportunity). So one issue in health insurance reform is whether an individual mandate involves the violation of fundamental liberty rights. And the answer here, I think, is that it does not. A mandate is a requirement on individuals not to free-ride. There is no right to free-ride, and so no right to be free of an individual mandate. The same is true of conscription during a just war. Conscription is a justified infringement of the right to liberty, and so is the mandate.

4. The Reps are less philosophically opposed to national health care than they are opposed to it on pragmatic grounds. They believe that health care will be delivered more efficiently if individuals are given the freedom to choose among private health insurance plans how to insure themselves against future illness. This might be true in an ideal world in which people were well educated, and not prone to self-deception or wishful thinking. But we don't live in an ideal world. If given the choice, the uneducated and the wishful thinkers (especially if healthy) simply won't pay money up front for the promise of future health care when they need it. Remember what the world was like before social security? Great for some, crushing for the rest.

I think items 1, 2 and 4 are more or less factual disagreements so let me leave them aside and focus on number three (majority rule).

There's no problem with majority rule in principle. But the system contains numerous provisions, including the 3/5 rule and the very existence of the Senate, that are designed specifically to prevent a small majority from running amok. To do an end run around these provisions, at a time when it is pretty clear that a majority of the public is skeptical or worse of your plans, is inconsistent with the spirit if not the letter of the rules.

I am also increasingly troubled by the tone of Obama supporters, which seems to run increasingly toward the "the other side is so irrational, there's no point even trying to talk to them, let's play to our own base and forget them" approach. However nobly it is put, this is the logic of a dictatorship and not a democracy. It cannot be denied that the Republicans would be doing the same thing or worse if in power. My point is that both parties have now become echo chambers that are able to see only their own virtue and the other side's villainy, and the turn from democracy to spectacle continues unabated. I love visiting Italy, but I never thought I would get their politics here at home.

Michael, I take your points, and certainly take it to be possible that you're right on the empirical claims, but the probabilities seem to me to cut in my direction. (Again I emphasize the I know I might be wrong.)

With respect to your point 1, I think that what was understood was that if all desired features of a comprehensive health insurance reform bill were to be in that bill, then 60 would be the targeted minimum of votes. Instead what is happening is that a small fraction of features will be handled through reconciliation, which features will placate some House Dems, generally more progressive than Senate Dems, who would otherwise not vote in favor of the (to my mind, already excessively compromised) Senate bill which already passed with 60. That strikes me as making all the differnce in the world.

On point 2, I really just don't know how central health insurance reform efforts in DC were to the MA special election, but (a) I doubt they were as important as you suggest, (b) even if they were central, it seems to me at least as likely that the sense in which that is true is the sense pursuant to which many Dems stayed away from the polls to register dissent with the excessively 'Republican' flavor of the Senate's compromises (I certainly felt that way), and finally (c) if they were central because MA citizens were thinking, 'I've got mine,' then they should be disregarded in any event as unprompted by principle.

As for point 3, I just don't think it's right. Perhaps I have become too suspicious, but I don't believe most Congressional Republicans hold much in the way of consistently applied principles in good faith at all. I think they are instruments of sectional interests, and I think they are out to hand President Obama a 'Waterloo' irrespective of the merits. In this connection, let me recommend this little paper on the economics of health insurance -- http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1484768 -- which makes plain that health insurance is in the nature of a natural monopoly (a fact that accounts for every other advanced nation's having gone single payer at least); there can accordingly be no serious belief that our present 'system' is anything other than seriously dysfunctional, disgracefully unjust, and preposterously inefficient. It might be that some Republicans simply fail to see this, but if I have to choose between taking them for dim and taking them for cynical, I'll interpret charitably and go with the latter.

Sam, once again I find myself very much on board with you. My only difference, I think, is that I might be more suspicious of Repub motives than you, in that I think your point 4 might give them too much credit in re their beliefs about what's apt to work best.

On the final matter you both discuss -- democracy and supermajority rules -- I'm inclined to reiterate something I suggested earlier: When the Senate was a truly prudent, carefully deliberative body in which level-headed statespersons argued carefully over honest disagreements rooted in good faith, supermajority rules could be interpreted as embodying certain Burkean norms of caution and complementary rules of respect. That conception of the Senate has grown less and less plausible since the early 1990s, and now it seems to me nothing short of anachronistic. The Senate seems little more than a House with longer terms. My guess is that soon we'll be hearing calls for its abolition just as we hear in re the Electoral College. But before we get there -- and perhaps this is the only way we won't get there -- I think we are apt to see the rules finally change so as to render this House number two more procedurally like a House number two.

I don't want to beat a dead horse here, but statements like "I don't believe most congressional Republicans [are] in good faith" and "there can . . . be no serious belief" that disagrees with me, coupled with threats to abolish whatever institutional arrangements happen to be in opposition at the present moment, are simply not consistent with the way issues are debated in a democratic society. The whole thing smacks of a self-appointed elite which is essentially contemptuous of the public and believes it can use what amounts to sophisticated name-calling in order to intimidate it. I think increasingly that the Tea Party Movement, while extreme in form, is essentially correct in its underlying analysis.

2. There has never been a requirement to get 60 votes for passage of a bill in the Senate. All 60 votes does is get the Republican to shut the phone book and quit the filibuster.

3. This reconciliation basically says, "If the Republicans are going to filibuster again, we'll skip that process and accept the bill THE SENATE HAS ALREADY PASSED." It's not circumventing the senate, its simply accepting their version of the bill.

4. The 60 vote rule is a rule and not a law, and the arguments about legality go the other way, saying that it violates the constitution to have a 60 vote rule in the first place, because the constitution says that a simple majority should dictate the passage of legislation.

I think the reality is that the Democrats used procedural maneuver and browbeating to pass a bill that a solid majority of the country pretty clearly doesn't want. The voters will respond as they see fit in 2010 and 2012. I don't see much point in debating this further.